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March 27, 2014
07:32 EDTBAXBaxter to create two separate, independent global healthcare companies
Baxter International announced plans to create two separate, independent global healthcare companies -- one focused on developing and marketing innovative biopharmaceuticals and the other on life-saving medical products. The two businesses operate in distinct markets with corresponding underlying fundamentals, and each possesses unique and compelling growth prospects, investment requirements and risk profiles. The spinoff will create two, well-capitalized independent companies with strong balance sheets, investment grade profiles, and disciplined approaches to capital allocation. In addition, Baxter believes that the separation will result in other material benefits to the stand-alone companies. The biopharmaceuticals business, with 2013 annual revenues of approximately $6B, consists of a diverse portfolio of recombinant and plasma-based proteins to treat hemophilia and other bleeding disorders, and plasma-based therapies to treat immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute blood-related conditions. The medical products business, with 2013 annual sales of more than $9B, offers a broad portfolio of intravenous solutions and nutritional therapies, drug delivery systems and administration sets, premixed and other injectable drugs, as well as inhalation anesthetics and hospital-based biosurgery products. This business is also integrating the Gambro AB acquisition. The corporate headquarters of both companies will be located in northern Illinois. Robert L. Parkinson, Jr., will serve as chairman and CEO of the medical products company, which will retain the Baxter International name. Ludwig N. Hantson, Ph.D., who currently serves as president, BioScience, will be named CEO of the new biopharmaceuticals company, which will be named at a later date. The transaction is intended to take the form of a tax-free distribution to Baxter shareholders of a new publicly traded stock in the new biopharmaceuticals company. The transaction is expected to be completed by mid-year 2015, subject to market, regulatory and certain other conditions, including final approval by the Baxter Board of Directors, receipt of a favorable opinion and/or rulings with respect to the tax-free nature of the transaction, and the effectiveness of a Form 10 registration statement that will be filed with the Securities and Exchange Commission. Baxter expects to incur one-time charges related to the transaction during the reporting periods preceding the separation and does not otherwise expect this to impact the company’s financial guidance for 2014.
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